Federal judge approves order for owner of Chicago-area real estate company to restore losses after Department of Labor investigation finds funds misappropriated
CHICAGO – Following a U.S. Department of Labor investigation, a federal court has approved an order requiring the president and owner of a Chicago-area real estate company to restore financial losses to participants after he misappropriated funds from the company’s cash balance pension and profit-sharing plans.
The order entered by the U.S. District Court for the Northern District of Illinois requires owner Michael Olszewski – sole trustee and fiduciary of Area Wide Realty Corp.’s Cash Balance Pension Plan and Trust and its Profit-Sharing Plan and Trust – to restore amounts due to both plans with interest. Olszewski will deposit $12,500 into the Profit-Sharing Plan, waive the restoration of losses to his own plan accounts, and reallocate his account balance in the plans to restore participants’ accounts to their Dec. 31, 2018 balances. Olszewski also agreed to terminate the plans and distribute more than $400,000 to participants and beneficiaries within six months of the entry of the order.
The action follows an investigation by the department’s Employee Benefits Security Administration and subsequent lawsuit. The department’s lawsuit alleged that in spring 2011, Olszewski transferred all funds from the Cicero-based company’s employee benefit plans to personal annuity policies in his own name with his wife as the beneficiary. However, in 2012 and 2013, he filed annual reports for the employee benefit plans indicating the plans had assets. In spring 2016, Olszewski deposited the amounts withdrawn in 2011 into plan accounts on behalf of each plan, but in 2017, Olszewski withdrew $79,649.50 from each plan and deposited the funds into a money market account in his name and his wife’s name. In 2015, Olszewski allowed the fidelity bond to lapse for both plans.
In the consent order and judgment, Judge Martha M. Pacold ordered that Olszewski be permanently barred from serving as a fiduciary in the future and also ordered him to pay a penalty of $15,845 for violating the Employee Retirement Income Security Act.
“This consent order ensures Michael Olszewski will not benefit from violating his employees’ trust,” said Employee Benefits Security Administration Acting Regional Director Kelli Hammerl in Chicago. “Fiduciaries must always work in the best interest of the fund. The U.S. Department of Labor’s Employee Benefits Security Administration is committed to ensuring the integrity of employee benefit programs and holding those who violate the law accountable.”
Walsh v. Michael Olszewski, Área Wide Realty Corporation, Area Wide Realty Corporation Cash Balance Pensión Plan and Trust, Area Wide Realty Corporation Profit-Sharing Plan and Trust
U.S. District Court for the Northern District of Illinois